The Case Against Auction Houses

I don’t have anything against auctions. But in an MMO, an Auction House is shorthand for “everybody sells everything for the lowest price the market will bear.” This is not always good game design.

Guild Wars 2 just got its auction house online, and already the price of crafted items is reduced to the literal minimum, lower than the cost of the ingredients for those crafted items. Crafters have the most fun when they can sell items to other players and make a profit. It’s just not as fun when there are literally millions of crafters competing for customers.

Similarly, Diablo 3 suffers from its auction house. The core experience for most players of Diablo 2 was finding random loot drops, and in D3, the auction house steals the thunder from that idea. (And in this case, the “real money” part doesn’t matter: the non-real-money auction house does just as much damage.)

But I mean, what are you gonna do, not have an auction house in a modern MMO?

Sure! There’s no reason every MMO should have an auction house. Lots of MMOs implement it unthinkingly, because they believe it’s a mandatory back-of-the-box feature. Few MMO developers take the time to think about the ramifications of the feature.

But let’s consider Star Wars Galaxies. No auction house, and widely considered one of the best games for crafters. Coincidence? Not according to Raph Koster, the lead designer (emphasis from the original):

Fundamentally, though, the biggest difference has to do with the basic approach taken. You see, in Star Wars Galaxies we designed the economy to be a game, not a side effect. In particular, the merchant class was created to fulfill the fantasy of running your own business. It had features like decorating your shop because that is part of the fantasy of being a shopkeeper in a world such as that — to build up the equivalent of Watto’s junkyard, or a Trade Federation.

And this meant that above all, one feature could not exist: the auction house.

The point is that crafters don’t inherently get fun from an auction house. It creates a buyer’s market. If players have to go window-shopping among various player-run stores (like they did in SWG), players have a hard time telling what the absolute best price is. Therefore prices don’t rapidly dwindle to nothing, which means crafters get to have fun pretending to be craftsmen. They get to earn pretend money for their pretend items, and everybody’s happy.

Yes, players have to spend more money without an auction house, but who cares? It’s pretend money in a video game. And they don’t even know they could have gotten a better deal. They do not suffer from this, unless the game is so strict with cash that they can’t afford things they feel they have to have… which is a different, but fixable, problem.

Why Games All Have Auction Houses

That isn’t to say auction houses are worthless. They came into existence to fill a need: not everybody wants to spend hours shopping for crap so they can go adventuring. If the core of your game is monster-stabbin’, and yet the success of monster-stabbin’ relies on crafted items, it behooves you to make sure players can get their hands on crafted items. Or else they can’t monster-stab.

Let’s say it even more generally: the transactions that let players play the game on a day-to-day basis should be fast and easy. The transactions for rarely-needed things, for luxury items, or for power-player goods don’t benefit from being trivialized like this.

But over time, every MMO has decided they must have this back-of-the-box feature, and they let you sell any item there. They just slap this feature in and don’t think about what it will do to their game. Remember the auction house in Champions Online at launch? It’s a great example of a perfunctory “we added this because it’s mandatory” implementation. And that’s very common.

This is partly due to our culture of game reviews. Game reviews are too important to screw up or take risks with. (I remember we had to add KvK battles to the Perpetual version of Star Trek Online because the producer was convinced we would take too much shit in the reviews if we didn’t have it right at launch. In other words, it was a mandatory back-of-the-box feature, nevermind that there wasn’t time to add it: we had to cut other stuff. This “had to be in.” Lots of AAA game design happens this way, based on appeasing knee-jerk reactions rather than making the best game possible.)

But I don’t expect my MMO to do particularly well on those game review sites anyway. Or even get reviewed by them. :)  And I don’t really see an auction house making a lot of sense for this game.

Alternatives to Auction Houses: Commodities Market

I think it’ll be okay if players have to do some shopping around while playing Project Gorgon. Partially that’s because I expect at least half of players — probably more than half — to do at least some crafting of their own. Making stuff is a big part of this game. And I think players get a lot less upset about having to shop around if they have their own shops to maintain.

The other reason I don’t think it’ll be a problem is that I’ll have other systems that help take the place of Auction Houses. I don’t want players to have to shop around for arrows and health-kits and other stock sundries that they need 50+ per day of. And I don’t want chefs to have to scour the world for rutabagas in order to make their stews. Some things just aren’t worth the hassle of window-shopping for.

So I’ll use the “Commodities Market” model. We added something like this to AC2 near the end of its run. It works like this: certain items are classified as commodities. These are items you collect off the ground, plus simple consumables like arrows and health packs, and so on. You can place these in the Commodities Market along with the minimum price you’re willing to accept for the items.

Players who want to buy them must purchase in bulk. They place an order for 100 of these items at a time (let’s say 100, it’s just an arbitrary number at this point). They also indicate the maximum they’re willing to spend. If their order can be filled immediately, they get their stuff instantly. Otherwise, their order sits around for up to a day until it can be filled. So it’s sort of like a blind auction. It helps keep prices from dropping too quickly, but still lets you sell your trivial stuff in a relatively painless fashion.

(There are several issues that need to be addressed with this model, the main one being that it’s very easy for rich players to inflate the price of things by buying all the commodities for cheap and reselling. I plan to fix that with a draconian measure: I’ll flag items coming out of the commodity shop so that they can never be re-sold in the commodity shop. That will remove market speculators.)

This isn’t quite as convenient as an auction house, but there are other tools I can add, too, like virtual shopping assistants which can search a list of your “favorite sellers”. I also want to do item-request boards (virtual Craig’s List, in other words). Actually there’s all sorts of different stuff we can do, and some of it can be a lot of fun. Although not as trivial as an Auction House, it can at least make the task of shopping more entertaining.

Different Approaches For Different Games: Shocking New Concept!

I wish MMO developers spent more time considering how their world is going to work on a macro scale, but they just don’t. I believe this is a side-effect of the modern design idiom of “thinking in loops” too much: you worry about making the game fun in 30-second intervals, and then 5-minute intervals, and then 15-minute intervals… and it becomes really hard to step back and look at the big picture. Why? Because when you’re optimizing your game to be fun every second of the day, an Auction House is always a win, because you remove all the boring shop-browsing part of the game. But now you’ve missed out on a much bigger type of fun for certain players.

In computer science terms, focusing too much on second-to-second gameplay causes you to optimize for local maxima instead of the global maximum. The fix is really simple, though: don’t focus too much on gameplay loops.

To wrap up: Auction Houses aren’t evil. And they fit some games very well. But the Auction House is a one-size-fits-all approach to handling every type of transaction in the game. And that doesn’t really make sense in lots of games, because we aren’t trying to model a real world economy. We’re trying to make a fun game.

In many games, some transactions should be more valued than others: if every player in the game can collect mushrooms and deer skins (and in this case, they can), then the purchase of mushrooms and deer skins should be painless. If, however, it takes you six hours and tons of money to make a Super Sword of Destiny, you shouldn’t have to compete with 5000 other people who also have Super Swords of Destiny, all dropping the price down below the cost of the raw ingredients! Where’s the fun in that?

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38 Responses to The Case Against Auction Houses

  1. Rauxis says:

    just a thought – what about a method to advertise your capability to craft something. Do you think that would create similar problems like AHs?

  2. Azuriel says:

    There is a HUGE difference between AHs in other MMOs and the AH in Diablo 3 and Guild Wars 2: namely, the latter two have global (i.e. cross-server) AHs. The “vendor+1c” effect in GW2 is precisely due to there being perfect competition across the entire NA region, assuming it is not already worldwide.

    In WoW, the worst it ever got was crafted items selling beneath the material price, which isn’t technically an issue for the “I farm for free” people. The markets were small enough that the auction barons got their profit margins but big enough that you could potentially find someone in Trade Chat willing to craft a specific item with your mats.

    Personally, I feel little craft stations only work well in small games (which you seem to be planning around). Aion had them when I played that game ages ago, and the streets was littered with 100+ people/bots spamming their wares 24/7; it was not a pleasant experience. Asynchronous shopping or bust, IMO.

  3. On the other hand, you have EVE Online which has auction houses, but is also considered a game with one of the most vibrant markets. What makes this different? The main thing is that the system has local economies. As Azuriel says above, the global nature of the GW2 auction house means that you’re competing against a lot more suppliers, so prices get undercut faster to the point that it sinks to the minimum. If anyone can buy from anywhere, then your have a race to the bottom.

    In EVE, even if you can search all sales, there’s a cost because your goods aren’t delivered automatically. That means that something that sells for nothing in one area might sell for a premium in another, because it will save people time and hassle finding and transporting it themselves.

    Another nice feature is to be able to put in buy orders as well as sell orders. If people can specify how much they’ll buy something for, then you’ll have more of a market rather than people just trying to sell goods for one coin less. You can see demand for a good and figure out if it’s worth trying to get an item before you sell it. You still potentially have a race to the bottom, but a high demand good might see the price rise as buyers try to out-do each other for limited supplies.

  4. Danc says:

    The real driver for auction houses that I’m seeing is the realization that these exchanges already happen for ‘MMOs of a certain size’ offsite in the form of RMT. By creating an official auction with secure transactions you end up reducing fraud and enabling a better overall experience. There’s a certain set of western developers that intentionally ignore RMT, but that is not a pragmatic response to a very measurable community issue.

    A question I constantly think about is ‘how much friction should be in the system’? Shrinking market sizes, increasing taxation rates, requiring people travel to shops and haggle in person. All these are forms of friction (and opportunities for play). The answer seems to be ‘add as much friction as you can while still remaining competitive with real money traders’.

    Azuriel makes a great point about the size of MMOs. Simple barter economies work great in smaller MMOs. As soon as you start seeing city-level populations players specialize and you get almost a phase change in how players approach trading. Same mechanics, radically different organizations and skills. Size matters.

    BTW, love the idea of flagging commodity items once they’ve been traded once.

    take care,

  5. Jason says:

    I think Koster is just playing with words. SWG most definitely had an auction house on which you could post items, though it also had the merchants and vendors you could sell items on personally.

    The auction terminals were found near the banking terminals (pre-NGE) and it was an exercise in frustration early on when you purchased an item that was on another world. You had to wait for the shuttles and/or starships. But, they most certainly had an auction house on which you could sell things.

  6. Whorhay says:

    SWG didn’t have an Auction House, it had a galaxy wide Market. There was no ability to bid that I remember but you could see any item posted on the market from anywhere else in the galaxy. There was no shipping of your items though you had to travel to at least the planet from which the item was posted to pick it up.

    The thing that SWG really got right though was item decay combined with resource control so that crafting was actually worth perusing as it’s own professions. Additionally crafting used up the same skill points you could use for combat related stuff, which meant not everyone was a crafter of any sort or necessarily a gatherer. Compare that to most MMO’s where every character can have 1 to 10 crafting or gathering professions in addition to whatever their combat roles are.

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  8. SnkByte says:

    The biggest problem is not with AH because i think that you are skipping something here (only if crafting is involved, D3 is different). What costs more, something easy to produce or something difficult? In most modern MMOs it’s harder to “produce”(gather) materials and then making an item from them is as easy as a mouse click (for literary everyone). Of course final items will be cheaper. And the answers is not to dumb down gathering – ofc of you don’t want to end with gathering/crafting like SWTOR. My answer to this problem would be very hard to produce (good/best) items even if you have all the necessary materials, or very hard to reach point where you can produce good items – but no one asks me :P Niche crafters, are they something from the past?

  9. Jason says:

    One additional thing to consider is that you can get a ton of low-priced items dumped onto the AH because of the very nature of the Crafting system. You gain skill in Crafting by grinding items and because of that you end up with tons of items that players at least hope to gain a few coins back for rather than simply destroying them. So, particularly early in a game’s lifecycle, you end up with a glut of items at particular levels on the AH.

    Not surprisingly, SWG actually addressed this very same issue. Tons of worthless guns and other items were being dumped onto the Market by players grinding their respective trades. Not only did this create a problem for players having to wade through thousands of items, but it created an extremely high load on the game itself having to deal with these and the subsequent requests.

    So, the developers added a “Practice” flag to the item creation step. When it was checked the item was never even created, the game simply consumed your materials, calculated your XP gain, and awarded it to you. No item created, less of a hit on the game servers, likely less memory consumption as a result of not needing to instantiate the item and insert it into the database, and then no glut of items poured onto the Market.

    I know this was off-topic from the OP, but its good food for thought.

  10. I’m with Jason on this one – The global nature of the auction house doesn’t help, but I’d argue that a big part of the problem is the requirement for soloable crafting professions as a back-of-the-box bullet point. SWTOR took the extreme of actually allowing players to immediately deconstruct all of the stuff they just built for skillpoints in order to deal with the oversupply of crafted items. By contrast, the example SWG merchant was an actual CLASS and no one expected everyone to level one (at least until some genius decided to require leveling random professions to unlock jedi).

  11. DrBrydon says:

    SWG’s Bazaar did have an auction option, but it was rarely used, at least that I saw. (I think the issue was that the top price was 20,000cr.) Eventually they did implement the ability to list player vendors on a global market, which allowed something like a global bazaar. (It would have been a lot more useful if 90% of game items weren’t “Generic Item”.)

    The challenge for players in SWG was that it was hard to find vendors for different items, even with different map enhancements. You could spend a lot of a time looking just for vendors, let alone the items you needed.

    I can see both sides of the AH question. I think if you aren’t going to have an AH, and I assume this means player vendors, then you should have a way to register vendors, like the Yellow Pages (am I dating myself). That would allow players to at least find armor, weapon, or clothing vendors easily. You might even have ratings….

  12. Whorhay says:

    One of the problems SWG faced was that items were only programatically identical if they were made using a factory run from the same schematic. That lead to the item database being of immense size. Which meant they eventually had to start trimming out items that still existed in players inventories. I came back from a break and was very disgruntled to find whole crates of weapons in my inventory junked from this. A better approach would have been to store items more generically in the database so it wouldn’t ever grow beyond a specific predetermined size.

    Anyways the problem of excess items being created by players leveling up their skills could be addressed in a number of ways:

    Make low level items required components in higher level recipes.

    Implement a system, possibly an NPC that buys the lower level stuff at a lower than market price for some lore reason, such as a quartermaster that needs more swords.

    A Practice mode that results in no useable item but perhaps gives increased experience gain.

    You could design an item system that inherently lacks any truly worthless items and so long as you have item decay there will be some demand. Sharpening stones in WoW are a pretty poor example of this but could have been made much better.

    If the items in the game have decay/durability you could give crafting exp for repairing them relative to the level of the item and the crafters skill.

    Personally I’d shoot for a combination of a few of those. I particularly like the idea of a player learning black smithing crafting things like nails, hinges, horseshoes, hammers, saws, drills, plows and such for NPC’s as well as players that need such tools. The NPC’s might have to have limits on how much they will buy in a day per server or maybe per player, whatever it would require some balance. But I hope you get the idea.

  13. Stratagerm says:

    I love crafting, particularly to make items for my main and alts.

    Sure, it’s nice to be able to sell at a profit, but not if it involves monopolies. What the crafters who whine about profit are really saying is “I want a monopoly.” Personally, I wouldn’t cater to the wannabe 1-percenters, but hey, it’s your game.

    In-game shops use geography to achieve local monopolies (perhaps shared with a few others). Not all locations are as good as others, so how would the game decide which players get to have shops in the prime locations of the crowded main city?

    The problem isn’t with the AH, the problem is with crafting systems. WoW limited the supply of crafted items by making some ingredients rare, but mostly by making recipes random rare drops; anyone lucky enough to get a Pattern: Rich Purple Silk Shirt can make a bundle, either by selling it outright or as a tailor making the shirts.
    Worst were the bind-on-pickup recipes that dropped in endgame instances so that non-raiders had no hope of ever acquiring them. As someone more interested in crafting than raiding it was one of the things about WoW I hated most.

    The issue is how to limit the supply of crafted items in a fair and equitable manner without resorting to using the random number generator to award monopolies to 1-percenters.

    As I see it the problem is with designs that make it possible to create items in the blink of an eye. Why do so many games allow one to “lovingly handcraft” a valuable item in the time it takes to click a mouse? Craftsmanship implies labor over a period of time.

    One game I’ve seen which implemented a crafting bottleneck well was Fallen Earth, where crafting takes real time whether you’re playing or logged off. Making crafting use real time limits the supply without resorting to randomness or monopolies. Yes, it’s still open to exploitation, or at least mass production, through the use of alts and additional accounts, but the idea of making item creation take real time seems like a good mechanic.

    It leaves unsolved the issue of how to provide a sink for all the commodities left unused by a time-throttled crafting mechanic.

    [I continue to be amazed that WordPress does not offer preview for comments.]

  14. bubble says:

    One thing that always surprises me is games not taking trader type players and running with it to create a subgame a bit like those old privateer type trading games i.e.

    The game world has a lore economy i.e. each settlement has a primary economic function and you can buy relevant items cheaper there, transport them somewhere else where’s a higher demand and make a profit – with trader exp per gold of profit e.g.

    A human zone has a town and eight villages: the town produces some general category like “city goods” that can be sold for a profit in the villages and the products of the villages can be sold for a profit in the city – but not a big profit. Each city also has their specialist goods which can be traded between cities for a bigger profit – the further the distance the more profit. A trader player might start with a large backpack with a low capacity and gradually upgrade through donkey, cart, wagon, eventually even to a ship with an upgradeable house to match from hovel to mansion.

    So you’d have a whole separate mini-game within a game where you level your trading by making a profit.

    Anyway, as well as providing a minigame this trading process could maybe also provide the auction house functionality but in a more worldy way e.g. a player places items he wants to sell with a trader npc in a settlement for a default npc price and if a trader player doesn’t buy it then after a while it goes and the player gets the money. However a trader player passing through that settlement might look to see what’s available and take it off the npc – depending on their trader inventory space – if he think he can sell it for more and while they’re in a zone a /trader will list traders with stuff to sell like a mini auction house or a travelling shop. (I used to enjoy selling crafted armor that way in EQ1 by travelling round levelling spots.) If a trader sells the item the original player gets the npc price and both get half the difference between the npc price and the trader’s sale price and the trader also gets exp for the difference in price.

    Hopefully it would lead to things like non-trader players dumping their stuff on the nearest npc trader and trader players making trips that go through various zones buying and selling.

    Something like that anyway.

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  16. Ettesiun says:

    There is also a problem of casual VS hardcore -or to be more precise time-poor VS time-rich.

    For time poor people, the problem is acquiring stuff at a good price with minimum time-investment. If they cannot buy easily for a low price, they will not buy, and in worst case, find the game too hard.
    Time-rich at the oposite will always enjoys new activity to do, even if it take more time to acquire what they want.

    GW2 and Diablo3 are Buy-To-Play games, and mostly target casual player that will do the big number of their revenues. So for them, trading post is cool, increase their perceives value of the game, and they will recommend the games to their friends. ArenaNet for exemple clearly target Casual players while trying to not impact too much hardcore player.

    You are right, adding Auction house should be think about : for all game that mainly target casual players, Auction House – and global one – is a must-have. For more “niche” games, this has to be evaluated.

  17. Chris says:

    I loved the SWG system (as stated, I recall the market having a max credits limit that made it only useful for smaller ticket items, which was fine) – it made buying your big ticket items more social than in any other game I’ve played. Instead of staring at a grid of items, jotting down notes to myself, and doing what felt like work, I needed to find someone that had what I needed. Which meant asking around – and not in some awful /trade channel, I asked friends and in guild. This led to absolutely wonderful “Oh, carbines? I know a guy on Tat, I’ll show you – follow me” moments, followed by a trek to the middle of nowhere to find a random dinky little shop with top tier guns. Sure, heading to merchant villages and going from shop to shop seemed a bit tedious at times, but that’s what shopping at the mall is. It also let good marketing (via signs and droids shouting) be effective, and a good purchase would lead to repeat business – instead of finding some new guy who had better gear the next time around because his items sorted to the top of the list, I’d just head to “my armor guy”, since he hooked me up so well before.

    In short, shopping was like.. shopping, pre-Amazon. I liked that.

  18. gentimouton says:

    “when you’re optimizing your game to be fun every second of the day, an Auction House is always a win, because you remove all the boring shop-browsing part of the game. But now you’ve missed out on a much bigger type of fun for certain players. […] The fix is really simple, though: don’t focus too much on gameplay loops.”
    I really like thinking in terms of loops. If you consider trading as a game mechanic on the same level as fighting, then you can also apply loops on it. For example:
    – seconds: buy and repost on current MMO AH, micro profits or losses, increase your bid in an English-type auction house where other players are present in person, haggle with clients and furnishers: there’s a lot of potential for excitement!
    – minutes: buy – craft – repost on current MMO AH, advertise in the street (current MMOs ignore this part completely), hold the shop, inspect the merchandize (and avoid crooks and scams!). Start building fiero.
    – hours: sell, organize inventories, run the logistics between your shops and the warehouses, sizable profits or losses.
    – days: look for trade partners, track your progress up the ladder, analyze trends, predict needs, plan logistics. Fiero and Schadenfreude.

    If you want barons to not undercut the beginners to death, make different leagues – much like PvP fighting has rooms for different level ranges. Or build incentives/deterrents for barons to not kill beginners: different materials, not worth the profit, tax barons a fixed rate, etc. In fact, I’d argue that everything applicable for PvP fighting is applicable for trading. Both can be competitive and/or cooperative, fast and/or slow.

    I’m also curious about which types of players would be pissed at not being able to resell commodities. Most likely, players who want to be traders, because trading in current MMOs happens through the AH, and they’re used to it happening like this.

  19. Gurog Lackey says:

    Personally speaking I would be fine with just a good trade channel one on one trades.

    I loved early AC2 with the total lack of npc’s and field crafting from stripping components of dropped items.
    I never use the action house in today’s MMO’s anyway. I just look at it and laugh and wonder how can a new player afford anything in there. Auction houses in MMO’s only fuel online gold sites and the prices reflect that.

  20. Lethality says:

    I fear you’re right – the auction house paradigm is here to stay, and it completely neutered merchant play :( The Guild Wars 2 trading post, with everything available to all players from every server all the time results in exactly what they pointed out – a glorified “available anywhere” vendor. Boring.

    Id like to see a nod back to merchant gameplay where in order to acquire something special, you had to make a special effort to acquire it… ask around, overhear things, and seek out the players who could make or obtain that item for you.

    As for every day commodity items (such as between the player and the monster-stabbin’ as you say) they are just as interesting available from a vendor (or, maybe a smattering of vendors all around the world – heaven forbid getting players out there and traveling! Unless of course there’s instant travel (as in GW2) but that’s a whole ‘nother blog post :)

  21. Eric says:

    I’m really distracted this week and feel like I haven’t had time to react usefully to all this great discussion, but a few scattershot thoughts:

    – I definitely didn’t mean to imply that I like the “vendor carts” approach to selling stuff, where players turn themselves into living NPC vendors. I don’t think that scales and it’s frankly very off-putting to me as a player. I don’t intend to implement that. I’m imagining players can have their own little shop instances at the high end of play… at the low end, players can rent out a few inventory slots on existing NPC vendors — they can sell items “on consignment” from existing NPC shops.

    – I am a little confused about the timeline of the SWG auction-house-esque features. The post I quoted (and a few others on that blog) are the extent of my knowledge of it… I can’t remember any of my short SWG experience. BUT I wanted to point out that Raph does mention that auction house features were added “eventually”. I’m curious if the features people are talking about here were added right at game-ship, or if they’re the features Raph is referring to as being added later. If anybody can clarify what got added when, that’d be useful!

    – I think the comparison of PvP and Crafting is apt, and one that I’ve been worried about a lot. I intentionally skipped PvP because it opens a can of worms I literally can’t spend the time on addressing, as a one-man MMO. And I do feel like I’ve opened a similar can of worms trying to make crafting work. In both cases, the happiness of some players is reliant on the behavior of other players. And in many cases, both PvP and Crafting have “winners” and “losers”, and of course the losers don’t keep playing nearly as long. My hope is to find a way to have a lot more winners than losers … my “scatter the crafting professions across a million different skill branches” plan is an attempt to do that. (Though currently still a bit too naive… but I hope it’ll shape up over time. Everything takes thinkin’ time.)

    – Some people (here and on the related G+ link to this post) have called for crafting to not be instantaneous. I just don’t see that being any fun. I hated crafting in DAoC, and it was pretty mild in that direction. I do like the idea of using some “book learning” to advance crafting skills, but that also can’t be what most of crafting is about. It’s boring. In terms of second-to-second activities for crafters, I don’t have a better plan than the traditional “put stuff in a recipe and an item pops out” plan… but I’d love to find something. (I personally liked EQ2’s approach to “combat-esque crafting” but I realize I’m in the minority: it was TOO involved, and meant that crafting couldn’t be a social time, because you had to focus too much on the button pressing. As a designer, I feel like the myriad goals of crafters paint me into a corner where I’m stuck making a fairly samey and bland solution… but it’s the best I have.)

  22. Yeebo says:

    I personally like the EQ II system as well. Another game that has an alternative to “put stuff in a recipe and stuff pops out” is Allods Online. You can read about the crafting system here:

    Several of the production professions use an oddball mini game that plays a bit like a card game. It feels almost like you are playing poker..”betting” on which values you need to lock down first. I thought it was pretty neat, but again (like the EQ II system) you have to pay attention while you are crafting.

  23. DrBrydon says:

    –The original functionality was for listing items on the bazaar for sale/auction. I don’t remember the price caps, but I think they were 6kcr for sale, and 20kcr for auction.
    –There was an enhancement that allowed you as merchant to have your vendor listed on the planetary map under general categories (food, armor, etc.), but I can’t remember how it determined which category to use. This cost extra vendor maintenance.
    –There was an enhancement that allowed vendors to show on the overhead map, which was only marginally useful since it listed the vendor’s name, which was often uninformative.
    –There was an enhancement that created a vendors tab on the global bazaar terminal, and merchants could control whether a particular vendor appeared there. You couldn’t buy there, but you could get a waypoint, then you would travel to the actual vendor to buy. Aside from actually browsing by category, there was a very limited text search.

    As a crafter (Tailor) this functionality wasn’t particularly useful in driving trade to me. By the time they implemented it, the end of the Jedi grind had destroyed the economy. On the other hand it was great for my buy-low/sell-high premium loot and art vendor. In general it did tend to create common pricing, especially for loot.

    As a side note it is my observation that the SWG economy during the game’s heyday was driven by the Jedi grind. The constant need for people to take up new professions led to a huge market for commodities, but also for things like food, armor, weapons, and even clothes (or doc buffs in Coronet and Theed). I had lots of customers working towards master dancer or musician who, as long as they had to do it, wanted to look good. On the other hand, as a crafter I found item decay annoying while it lasted, and having people come in to have me repair things was a distraction, and I didn’t feel I could really charge for it.

    I don’t think that was the intention of the Jedi grind, but a it worked by causing many players to keep changing gear. And the best part was that those most committed to the grind had to do it most often. I can’t think of a way to create that sort of turnover in a game, except to jack up decay rates, and eliminate, or make rare, repair.

  24. Mike says:

    Commodities prices are always going to remain relatively stable, so what is the value of having players trade between themselves for them, rather than having NPC vendors buy and sell as much of them as you need?

  25. Hagu says:

    What is wrong with efficient markets? If the market clearing price is 100, everyone wants inefficient markets so as to be able to sell for 200. In the same way that sugar and rice farmers think sugar and rice tariffs are a good idea and just require the 99.9% who are tarriffed to pay a bit more. The EVE economy is wonderful, but I find the huge time sink in moving around there to be too old school; I just don’t think Westerners accept the same amount of time sinks as were tolerated a decade ago. Someone being able to log into LoL or WoT, play a game and then go to bed before I can get my transport ship to Jita is a very niche game.

    The biggest problem I see with the 1c bidding wars is the UI (WoW w/o addons is pretty sparse and SWTOR and D3 were no better.) What if you could place buy orders and buy and sell orders behaved the same way as EBay; you place how much further you will go and the market does it without rewarding camping/bots. You would quickly get to the equilibrium price.

    Why not make crafting be profitable by being able to produce things efficiently rather than overcharge a casual player who does not know it is half the price next door? E.g. real world sort of production efficiencies – if you have made 256 arrows they cost 90% of what it costs someone who made 128 or 81% of someone who made 64. Or you can choose to invest time or material in improving a skill/product so part of crafting is picking the right markets to research/invest in. Personally, when I found out I overpaid for something, it makes me more cautious in the future. Is going around to 40 shops on a planet seeing who has the best ammo prices fun? And even if nostalgia makes people say it was fun years ago, today I am used to being able to have online web sites that list in game prices. If you deliberately don’t provide efficient markets, to me at least it will just feel deliberately inefficient. And I want getting new gear to be fun, not feeling like I just bought a used car in Casablanca and will always feel like I was overcharged, even in the rare case where I was not.

    Inefficient markets, like no AH, just penalized the majority of the players, the ones who don’t play the buying efficiently minigame well. Instead, why not reward producers who produce well.

    I liked D3 differentiating between commodities and gear. Although after reading you, I think there are 3 classes: supplies (ammo, potions), commodities (ore, herbs, gems – I purchased over 125,000 Whiptail in the 30 days before 5.0.4) and gear.

    Personally, I would never play a game that required trading in trade chat. Life is way too short.

  26. Brett says:

    I generally agree with you on the inherent lack of fun from global Auction Houses, but I’d say further that part of the problem seems to me to be a matter of undifferentiated products and undifferentiated traders.

    Most MMOs have ‘crafting’ systems that at their end points appear to be based on industrial production – you buy a certain amount of raw material in bulk at a discount price, calculate the quantity of consumer goods that you can create from the raw materials, then ideally receive a certain percentage profit from the markup at which you sell the end goods. I think that can certainly be fun to some players in the same way that commodity trading can be fun, but I really wish some MMOs would take more interest in the crafting aspect than the production aspect. It seems to me that if any blacksmith who spends a certain amount of time in the profession produces the exact same goods as every other blacksmith, then it is only logical that competition centres on the lowest possible price. The ‘game’ is one of resource management, not necessarily craftsmanship.

    I don’t understand why GW2 didn’t combine its amazing customisable armor-dye system with its crafting professions, I think that would have offered enormous product differentiation if it was handled in a way that didn’t allow mass-producing of every possible combination.

    Personally, I would really like to see more options for crafting items that differentiate my character and their crafts from the fifty thousand other characters with the same profession.

    Let me throw some random ideas out in this vein. Let’s say that my blacksmith had a recipe for a simple bronze shortsword that took 12 copper ingots, 12 tin ingots, 6 leather strips and 8 wooden blocks. Sure, I could make that simple recipe with a high degree of success, but what if I could choose to vary the recipe slightly before the sword has cooled, and refine the weapon using additional commodities?
    * Each copper ingot I add in a refinement step increases the speed at which the resulting weapon can be swung slightly (being lighter) but also causes it to strike for slightly less damage (being softer).
    * Each tin ingot I add in a refinement step increases the chance of dealing a critical blow (being harder/sharper) but decreases the speed at which it can be swung slightly (being heavier).
    * Each leather strip I add in a refinement step increases the hit chance slightly (being more comfortable to wield) but decreases the range of the strike slightly (having a more complex hilt).
    * Each extra wood block I add in a refinement step increases the range of the strike slightly (having an elongated hilt) but decreases the armour penetration (having a greater chance to fracture).
    * There would be a chance on each refinement to irreparably destroy the weapon, leaving you with only a few salvaged commodities, so very heavily modified weapons are difficult to make and valuable as a result (while also sinking some excess commodities and making unmodified but guaranteed-to-work items an option)
    * Maybe you can add additional resources like gems, runes or whatever to increase effectiveness against certain types of targets, at certain times of the day or season, or in certain situations, the possibilities are endless.

    Providing that the raw materials are not overly abundant and there is no clear optimal solution, that kind of modifiable system provides me with a vast array of choices about what type of sword I’m going to try to make and sell, and just that one recipe seems to offer a huge variety in resulting goods. Suddenly choosing to buy a bronze shortsword isn’t a simple math problem on finding the best price, but seeing which craftsperson has produced the weapon that suits me best.

    Even more so than customising my crafts, I’d love to be able to rely on creativity and ingenuity to come up with new ones that differentiate me further as a craftsperson. As an example, what if it were possible to design new items in which by consuming a large quantity of raw materials (representing the trial and error of research) and an enormous fee (to prevent swamping the live team with requests) you could create your own recipe? The player would input an item name, perhaps a short tooltip description, an existing model skin, an existing texture (or if possible a colour set), and the quantity and type of materials going into producing each item (following guidelines to ensure appropriate amounts). The GMs could then approve or reject the recipe to ensure quality control, and if approved that craftsperson could then either use the recipe to make their special items (“designed by so-and-so”) or perhaps sell a copy of the recipe to other players to make even more profitable businesses. A clever player might come up with recipes that use a lot of NPC corpses to replace a particular commodity that is scarce in their area, or perhaps a quest item that is so rare that the resulting crafted items are all but unique. Better named and more interesting items also should make a more successful craftsperson.

    Anyway, sorry for the length of the comment, I think I got a bit carried away there.

  27. Jason M says:

    Differentiation is one huge reason why crafting in SWG was so amazing and remains, in my opinion, one of the best ever made in a game. Resources themselves had properties and those properties, plus your skill, played directly into the quality of the items you produced (with some notable exceptions, such as furniture that had no values to alter). However, even with furniture you could still rename them and differentiate yourself in that way.

    A crafting system doesn’t have to be as detailed as that, but taking at least small steps towards that would go a long way to helping the AH system not be so dull.

  28. bubble says:

    “In terms of second-to-second activities for crafters, I don’t have a better plan than the traditional “put stuff in a recipe and an item pops out” plan… but I’d love to find something. (I personally liked EQ2′s approach to “combat-esque crafting” but I realize I’m in the minority: it was TOO involved, and meant that crafting couldn’t be a social time, because you had to focus too much on the button pressing.”

    That last point is (or was?) important imo. Some players like crafting and want it to be as much of a mini-game within a game as possible. Others i think are really traders who try to make crafting into as much of a trading mini-game within a game as possible. And others are (or were) actually socializers in disguise who use the monster-free time of gathering and crafting as their chat-time.

    “I think the comparison of PvP and Crafting is apt, and one that I’ve been worried about a lot. I intentionally skipped PvP because it opens a can of worms”

    I wonder if that’s the general answer? If you can’t make a game component into its own mini-game within a game that the people who like that component spend all their time doing (if they can) then leave it out.

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  30. Indy says:

    I long ago (before WoW came out) realized that the economics of crafting in MMOs is fundamentally different from the physical world… supply and demand still applies, but most people seem confused as to what process is actually occurring.

    In crafting, we are not adding value to raw materials. We are *extracting* valuable XP/skillups from the raw materials and are selling the waste products, ie, crafted gear. Raw materials are valuable because the XP is still locked inside… I think any game system that involves grinding – ie making multiple objects from materials – as a requirement for getting skill, is ultimately going to end up at the same place where raw materials are valuable, and the crafted gear isn’t.

  31. Timulus says:

    Indy hit the nail on the head imo

  32. Jason M says:

    @Indy: That is true in cases where looted gear is better than crafted gear, but in cases where the Crafted gear exceeds looted (or where there is no looted gear) then the value also lies in the Crafted equipment itself and you have more of a market economy. Eve and pre-NGE SWG come to mind.

  33. Indy says:

    Eve doesn’t count, since you don’t get skillups/xp grinding out crafting. It certainly tends to apply to games without looted gear — Runescape for example. Note in WoW how the value of the new tier of materials is insanely expensive at the start of an expansion, then drops as more players exhaust the skillups that can be achieved with them.

    I’m not versed in all the details of pre-NGE SWG, but I think other factors came into play there… possibly mainly the limited number of skills a player could have at a given time, so mats weren’t used for xp all that much; the crafted items were insanely varied compared to other MMO’s where every crafter makes identical items, so the best would be valuable and I suspect items with low stats weren’t worth enough to try to sell.

    I’m thinking the best way to solve the problem would be to divorce the crafting skill-up process from the materials used to craft sellable items. Maybe you could gather special mats and make vendor trash, maybe you work for NPC crafters as an apprentice in some sort of mini-game (or buy skill from them with monster drops or as quest rewards). Do most crafters actually *like* the current system of grinding out lots of (probably nearly worthless) stuff to skill up? Or are they more interested in getting something their character has made that someone else can use/buy? I suspect it’s the later.

  34. Jason says:

    @Indy: Doubtful that Crafters like grinding items any more than Adventurers like grinding monsters for XP. Finding a better mechanic in both situations would most likely make for a decent game.

    I actually think Eve’s system is a good way of doing it. Your skills improve over time regardless of what you do in-game. Problem solved on both sides.

  35. Gibbilo says:

    I agree with your points theoretically, but I think you are forgetting several important concepts that I will elaborate briefly. (My point is that i think the current system, for GW2 at least, is a good thing):

    For the most part, everyone is thinking about this completely wrong. You’ve been brainwashed by countless games and economies before you.

    The reason you craft in GW2 is not for money. You craft for access to high end soulbound items, leveling, account achievements, and other vanity bonuses.

    If your goal is to make money, don’t sell end items, sell the materials. All this is, is just a swap from previous model where you make money selling end items on not mats. Why is this good?

    The thing everyone also forgets is it goes both ways. If all the end items are going for npc vendor price. And this is a GOOD thing.

    Why? Well, Do you want those high end daggers with inscription upgrades? Go buy them for super cheap and slightly more than npc vendor.

    —-Basically, this new economy is about creating access, not restricting it— like all models before it. This is is the main point I’m trying to make, and why the global auction with excess surplus is good.

  36. bubble says:

    “Basically, this new economy is about creating access, not restricting it— like all models before it. This is is the main point I’m trying to make, and why the global auction with excess surplus is good.”

    Yes but this misses the crucial point that some players particularly like crafting so when you make a crafting system that everyone does for rewards which are *external* to liking crafting itself then you kill part of the fun for the crafters without gaining anything. The non-crafter players get no extra pleasure from crafting for the exp than from killing mobs and questing – if anything they get less – while the crafter players get less.

    An analogy would be a certain type of player particularly enjoys playing necromancer type classes and a game says we’re going to “create access” to necro abilities by giving them to every class.

  37. tad says:

    In EQ1 trading was done at the Eastern Commonlands tunnel – it was a blast and far more interactive than an Auction House. I hope you continue your Crusade against the AH – its about time the relegated to the backbin on MMO ideas.

  38. Andrew says:

    I think this analysis misses some critical factors. Let me explain, contrasting EVE, Guild Wars 2.

    In a game, the fundamental commodity is effort. Supply will vary based on the effort required to create something. In real life, other factors come into play, such as availability of talent and raw materials, and pure inventiveness, but in the more restricted environment of a game all such restrictions can be overcome with effort – even if it’s just grinding skills to reach a threshold required for some industrial activity.

    You also need consumption. You can’t get a scarcity situation – needed for markets to function – if there is not a fundamental consumption mechanic. Sometimes, population and level growth can provide this, but mostly you need a mechanic that actually consumes resources.

    Let’s look at where EVE focuses on these two factors while GW2 minimises them.

    EVE industry has barriers to entry. To do industry in EVE, you need to train skills. While you can reach a decent “starting” level in a couple of weeks, that’s still a couple of weeks of game time devoted to actually participating in industry and not other aspects of the game. In GW2, everyone can easily become a primary and secondary producer.

    In EVE, harvesting resources costs time. Significant time. In GW2, you are encouraged to harvest resources as you go. Similarly, EVE production takes time and consumes limited character resources. Further, production sites are limited in capacity, creating competition. GW2 production is instant and unlimited except by raw materials.

    Note: certain raw materials, such as jute, actually have significant value in the GW2 market. This is because it is a limited resource, that requires a degree of effort to obtain (you need to salvage items), whereas it is a high-demand input to a lot of stuff. In contrast, items in GW2 are often a by-product of training your crafting levels, and priced accordingly.

    Finally, EVE puts a cost on location. EVE materials and finished products need to be physically moved by a player from source to factory to market to buyer. This introduces more effort into the production chain, and effort is what we are actually selling.

    That’s industry. What about markets?

    I suspect EVE’s regions have less effect on the mass market than one might think. They do make it easier for small operators to re-sell products at a premium and perform arbitrage between markets, but EVE does have one central market (“Jita”) that moves vast volumes (more than all the other regional markets combined), and anyone willing to put in a little effort can find out the current Jita prices.

    So why do the Jita markets move about rather than devolve to cost +1?

    The first has been mentioned above (by me and others): in EVE, transport costs time. People are willing to buy something expensive but here rather than travel half an hour or an hour for a lower price. Which also means people are willing to proactively transport those goods in order to collect that price difference. Instant transport removes this.

    Production time and training time also limits the market’s ability to adapt. If there’s a lot of demand for widget X, every man and his dog cannot simply produce a bunch of them to fill that demand. Even in the simplified EVE industry model, it can take a couple of weeks to re-tool to meet that demand. As a result, there is money to be made in successfully predicting what will sell in a week or two weeks. There’s also money to be made in buying surplus and then selling it off later when supply drops off, or even trying to artificially manipulate supply and demand. None of this is possible in an environment with instant production.

    In EVE, the market under-cuts NPCs. Some of the best stuff is available as drops, but these are rare and/or risky compared to the stuff available in the market. You cannot get the best spawned items simply by throwing more effort at the problem. This creates a much bigger demand for not-as-rare-but-decent stuff. There’s also the little fact that people can take the rare stuff off you, which creates meaningful tension as to how much to upgrade. Conversely, the game doesn’t spawn enough “stuff” to keep a player supplied; regular supply requires using industrialists. This forces players to either invest their own time in industry or buy the industrialists’ time.

    Here’s the summary: time is money (more correctly, effort is money). If you want a working market, you need to have mechanics that tie effort to products, because that effort is what gets sold. If a product doesn’t cost effort, then it will be priced accordingly.